October 17, 2018



Building up a healthy retirement fund to enjoy retirement should be a priority for most people.

Having built up your pension fund, you arrive at a crucial milestone – making the right decisions about your income in retirement. Be careful – do not under-estimate the magnitude of this decision, you’ll probably be retired for 20 or more years – you’ve got to get it right.

Pension Income Drawdown, now known as Flexi Access Drawdown (FAD) was first introduced in 1995 as a more flexible alternative to an annuity. The ‘pension freedoms’ legislation that became effective in 2015, has raised the profile of FAD significantly. Prior to the freedoms, the vast majority of retirees opted for an annuity purchase, however, this is no longer the case with most people now opting for FAD.

There’s more awareness of the availability of FAD and many find the flexibility and control rather appealing. However, care must be taken to ensure that your income is sustainable and will last you throughout your lifetime. With FAD you can withdraw income to suit your need, lifestyle, and retirement goals. Should you exhaust your pension fund, you will exhaust your income stream.

Discipline is absolutely key, as is the on-going investment management of your pension fund.

Obtaining the best possible investment return from your pension fund will have a major role in the on-going sustainability of your funds.

Professional help in managing your FAD is the way forward. There will be fees to pay for this, but overall, you’re likely to get better outcomes.

Please note that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

There’s a useful link for further reading on FAD here.


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